When we think of discrimination we usually think in terms of intentional acts which exclude members of certain groups from employment, housing, or other opportunities. The civil rights laws, however, protect against not only intentional acts of discrimination but acts which, though apparently neutral on their face, actually have a discriminatory impact on protected groups.
Not all discrimination is illegal. We discriminate against various people regularly and legally. We choose people with good credit over those with bad credit. We reject applicants who have a previous history of evictions or nonpayment of rent. Such discrimination is legal and based on a legitimate business purpose. Illegal discrimination occurs if we make a choice based on a person’s membership in a protected class. These protected classes include, under the federal Fair Housing Act, race, color, national origin, religion, sex, disability, and families with children. (The first five categories were contained in the original Fair Housing Act. The last two categories were added when the Act was amended in 1988.)
Under what circumstances might you be liable for violating the law unintentionally? What if you implement a policy which is neutral on its face and has no discriminatory intent but has a discriminatory effect when actually put into practice? This is the question of disparate impact.
The disparate impact doctrine is a creature of court decisions. You will not gain any information on disparate impact by reading the Fair Housing Act. The courts decided that the civil rights laws imply a disparate impact rule in order to enforce the goals of equal opportunity. There has never been a US Supreme Court case which says the Fair Housing Act is violated by a practice which has a disparate impact. However, the majority of the federal Courts of Appeals, including those in Missouri and Kansas have upheld the disparate impact doctrine. This is primarily due to the fact that the US Supreme Court did uphold disparate impact in employment law in the case of Griggs v. Duke Power Company (1971). Since the same language is used in both the Fair Housing Act and Title VII of the Civil Rights Act (the subject of the Griggs case) it is reasonable to conclude that the same rule would be applied to Fair Housing.
Disparate impact is presently becoming a controversial issue due to several cities, including Kansas City, Missouri, raising the issue of the impact of housing restrictions directed at persons with felony criminal records. Several cities across the country have enacted restrictions on rental property owners regarding the general exclusion of felons. New York and Philadelphia have enacted ordinances to prevent blanket discrimination against felons and San Francisco and Seattle are presently considering such restrictions. These ordinances would make felons a protected category like the now existing seven categories. At the present time, the city of Kansas City, Missouri, has filed fair housing complaints against properties which have a general prohibition against renting to anyone with a felony record. The city's claim is that a general prohibition against renting to felons will have a disparate impact on racial minorities, specifically African-Americans and Hispanic Americans, and therefore violates the Fair Housing Act. The Human Relations Department of Kansas City, Missouri, is apparently of the opinion that a blanket prohibition on renting to a felon is a violation of Fair Housing but a restriction limited to a specific time frame would not be a violation.
Many courts have considered the issue of disparate impact. Some courts have stated, "the relevant question is whether a policy, procedure, or practice specifically identified by the plaintiff has a significantly greater discriminatory impact on members of a protected class." The court considers whether the impact of the defendant's policy or practice is significantly greater on a class of persons protected by the Fair Housing Act than it is on unprotected class members, and if so, whether the defendant has provided a sufficiently strong justification for using this policy or practice to overcome the prima facie case that the plaintiff showing of disparate impact has created."
One of the earliest cases raising the issue of disparate impact was Betsey v. Turtle Creek Associates in 1984. The owners of the property decided to make it an all adult property and began to evict all the families with children. (In 1984 it was legal to discriminate against families with children, so there was not the blatant violation there would be today.) As with most disparate impact cases, the evidence was largely statistical. Although families with children were not a protected class at the time, the facts were that of the families to be evicted, 74.9% of the nonwhite families were given eviction notices and only 26.4% of the white families received such notices. The court held that a disparate impact had been proven.
Although statistics are important in determining whether there is a disparate impact on a protected class, there is no precise formula for such a determination. The courts have clearly held that only a "significant" discriminatory effect violates the act.
The Eighth Federal Circuit Court of Appeals, in which Missouri is located, has recently dealt with two disparate impact housing cases. In 2003, the Eighth Circuit decided Oti Kaga, Inc. v. South Dakota Housing Development Authority. This case involved a complicated dealing with the funding of housing for Indian tribes in South Dakota. The plaintiff alleged a disparate impact on those tribes. The court set forth the standard for deciding disparate impact cases. First, the plaintiff must "show a facially neutral policy has a significant adverse impact on members of a protected minority group." If the plaintiff shows such an impact, the burden then shifts to the defendant to show justification for its policy. If the defendant is able to show such justification, the burden shifts back to the plaintiff to show that another policy would accomplish the defendant's goals without the discriminatory effect. One of the reasons that the plaintiff failed in this case, was that it failed to offer any alternative policy which would meet the defendant's needs as effectively.
In 2005, the Eighth Circuit decided a case which arose in St. Louis, Missouri. Darst Webbe Tenant Association v. St. Louis Housing Authority involved a plan to demolish a property of low income, public housing rental units to be replaced by a mix of housing which included low income, public housing, low income tax credit units, and market-rate rental units. The property to be demolished included 758 low income public housing rental units and 242 units designated for the elderly. By the time of the revitalization plan, only 220 of the public housing units remained occupied. The residents were mostly African-Americans and/or female-headed households with children. The plaintiff therefore, alleged a discriminatory impact on race, sex, and familial status. The court restated the proof necessary to make such a case. The plaintiff must demonstrate that the challenged action or policy “results in, or can be predicted to result in, a disparate impact upon protected classes compared to a relevant population.” The burden then shifts to the defendant to show a legitimate non-discriminatory policy objective. If the defendant offers such justification, the plaintiff “must offer a viable alternative that satisfies the [defendant’s] legitimate policy objectives while reducing the . . . discriminatory impact.” In the Darst-Webbe case, the plaintiff failed to offer any viable alternative.
We will now turn to the proposal of making felons a protected class and the possible progress of a Fair Housing case based on disparate impact.
When looking at the present categories which are protected by the Fair Housing Act, it is apparent that felons are not similar to those which are presently protected. All seven present protected classes consist of categories in which people have no choice in participation – race, color, national origin, sex, persons with disabilities – or groups in which the choice should not be relevant to a landlord, such as religion or families with children. The same cannot be said regarding felons. No one is born with a felony conviction. A felony conviction results from choices made by that individual. To give felons the protection of the Fair Housing Act protects them from the consequences of their own conduct. No such protection is presently afforded to anyone by the Fair Housing Act.
There is another obvious distinction between the present protected classes and felons. The fact that a person is African-American, Jewish, Catholic, male, female, etc., does not tell you anything relevant about his/her character or what kind of tenant that person might be. On the other hand, the fact that a person has committed a felony does say something relevant about his/her character. It has been proven that the person, on a least one occasion has shown disregard for the life, safety, or property of another person or has otherwise disregarded the rules of society. Is a landlord being totally unreasonable to think that a felony conviction says something relevant about what kind of tenant that person might be? Preferring a non-felon to a felon is not as unreasonable as preferring a member of one race over another, for example.
Let’s look at the scenario of a property owner who refuses to rent to anyone with a felony conviction and a suit brought by the City based on disparate discriminatory impact on a protected class. Let’s refer to that protected group as Group X. How might such a Fair Housing suit actually progress?
The City would be required to prove that a refusal to rent to anyone with a felony record would have a “significant adverse impact” on members of Group X. That is, not necessarily that felons can’t find housing, but that members of the protected Group X can’t find housing. If the property in question had any significant number of Group X residents, as compared with the local population, the City might not prove its case.
For the sake of argument, let us assume that the City has shown such an impact. The property owner would then offer its justification that, regardless of its effect on any group, it is reasonable to exclude felons for the sake of safety and crime prevention. If the court accepts such a justification, the City then has the burden of showing how the same goals can be achieved with less discriminatory results. The City’s position thus far has been that the property owner should put some time limit on the use of felony convictions rather than a blanket prohibition – but would that solve the disparate impact problem?
Let us assume that in the last 50 years, 50% of felonies were committed by members of Group X, 30% by members of Group Y, and 20% by Group Z. Certainly, members of Group X would be hardest hit by a blanket prohibition against felons. Suppose the City argues that a property owner should only look at crimes committed in the last ten years. What if the statistics are the same and 50% of the crimes committed in the last 10 years were committed by Group X members? What if the statistics were the same for crimes committed in just the last year? If the statistics were basically the same for any given period of time, then the same impact on Group X would exist regardless of the policy in place. If that is true, then the City would not be able to offer “a viable alternative that satisfies the defendant’s policy objectives while reducing the discriminatory impact.” In short, if the City brings a lawsuit based on disparate impact, it has the burden of offering a plan showing that the same objectives of crime reduction can be accomplished in a manner which has a lesser impact on the protected group.
At the present time, HUD has not taken the position that a blanket prohibition against felons violates the Fair Housing Act. In a letter dated June 17, 2011, Sandra B. Henriquez, Assistant Secretary for Public and Indian Housing, discourages such a prohibition but does not state that it constitutes a violation of law. Henriquez states that the Obama administration “believes in the importance of second chances – that people who have paid their debt to society deserve the opportunity to become productive citizens . . .” Her letter to Public Housing directors points out that the only “explicit bans on occupancy based on criminal activity” (in Public Housing) is for persons involved in methamphetamine production on federally assisted housing property and registered sex offenders. “Beyond these restrictions, PHAs have broad discretion to set admission and termination policies” and they may consider evidence of rehabilitation and likelihood of “favorable future conduct.”(Emphasis added.) It is noteworthy that even when addressing Public Housing directors (over whom HUD has more control than conventional landlords) the Assistant Secretary does not say “Thou shalt not discriminate against felons,” nor does she say that such a policy violates the Fair Housing Act.
Quotes not otherwise attributed are from “Housing Discrimination: Law & Litigation,” by Robert G. Schwemm.
“San Francisco Considers Legal Protection for Criminals,” Claudia Cowan, Fox News, July 22, 2011.
Robert J. Wise has been practicing housing law in the Kansas City metropolitan area since 1975. He is a former member of the AAKC Board of Directors, former executive director of the Missouri Apartment Association. He is presently the executive director of Mid-America Crime Free, Inc. and a partner in the law firm of Wise & Anderson, LLC. On October 19, 2011 the partners of Wise & Anderson, LLC will be presenting a seminar on fair housing and other housing issues. Mr. Wise can be reached at firstname.lastname@example.org or email@example.com.